Each month, Horizon Federal Credit Union provides a Financial Fitness articles for the readers of NorthCentralPA.com. Here is the March 2022 article on Planning for Retirement.
If you are like the majority of Americans, you are not financially ready for retirement. According to a survey published by CNBC in September 2021, three out of five people surveyed said they anticipate they will still need to work later in life. In the same survey, 41% claimed it “would take a miracle” for them to retire in financial security (1).
Preparing for retirement requires active financial planning. Social Security payments will account for just a portion of what most people will need to pay expenses post-retirement. You can view your anticipated check amount by creating an account and logging in at the Social Security website.
As a rule of thumb, financial experts recommend having three times your annual salary saved by the time you reach 40, and six times your salary saved by 50. If you are earning $50,000 a year those amounts calculate to $150,000 (by 40) and $300,000 (by 50). If you are like the typical American, your retirement balance is under the recommended amounts.
According to a 2020 TD Ameritrade report, 60% of 40 year-olds have less than $100,000 saved for retirement, with 41% having saved less than $50,000 saved. At age 50, the numbers are not much better; 53% have less than $100,000 saved with over one-third of those responding having less than $50,000.